ANALYSIS OF THE ELECTRICITY CONSUMPTION AND CRYPTOCURRENCY PRICE DYNAMICS (GEORGIAN CASE)

revaz geradze

Abstract


Recent fluctuations in the cryptocurrency prices raised a question about profitability of the mining process. As a result, a lot of companies around the world stopped producing cryptocurrency. Same happened in Georgia, however the share of electricity consumed in the mining process (counting only direct consumers) in the total electricity supply of the country exceeded 5 percent in 2019. The same indicator for the whole world is small enough and approximately equals to 0.3 percent of the total world electricity consumption. It is relatively new and remarkably important for the countries around the world to work on various approaches of regulating mining and usage process of cryptocurrencies. The regulatory methods significantly differ country by country. Existing regulations mainly cover status of the cryptocurrency and taxation approaches. Given foreign experience, it is desirable to consider the main models of tax regulation of cryptocurrencies and to adjust them to the reality of Georgia.

Keywords


cryptocurrency, cost of electricity, price of cryptocurrency, regulation of cryptocurrency, Energy Sector Risk.

References


Board of the International organization of Securities Commissions (2020) Issues, Risks and Regulatory Considerations Relating to Crypto-Asset Trading Platforms. https://www.iosco.org/library/pubdocs/pdf/IOSCOPD649.pdf.

Cuervo C., Morozova A., Sugimoto N. (2019) Regulation of Crypto Assets, International Monetary Fund.

Edwards R. F., Hanley K., Litan R., Weil R. L. (2019) Crypto Assets Require Better Regulation: Statement of the Financial Economists Roundtable on Crypto Assets, Financial Analysts Journal. https://www.tandfonline.com/doi/full/10.1080/0015198X.2019.1593766.

European Central Bank (2012) Virtual Currency Schemes. https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf.

International Monetary Fund (2018) Treatment of Crypto Assets in Macroeconomic Statistics. https://www.imf.org/external/pubs/ft/bop/2019/pdf/Clarification0422.pdf.

The Law Library of Congress (2019) Regulatory Approaches to Cryptoassets in Selected Jurisdictions. https://www.loc.gov/law/help/cryptoassets/cryptoasset-regulation.pdf.

Mandeng O. J. (2019) Basic principles for regulating crypto-assets, London School of Economics and Political Science. https://www.researchgate.net/publication/333902492_Basic_principles_for_regulating_crypto-assets_Basic_principles_for_regulating_crypto-assets.

Massad T. G. (2019) It’s Time to Strengthen the Regulation of Crypto-Assets, The John F. Kennedy School of Government, Harvard University. https://www.brookings.edu/wp-content/uploads/2019/03/Timothy-Massad-Its-Time-to-Strengthen-the-Regulation-of-Crypto-Assets-2.pdf.

Internet resources:

Hsu S. (2020) China's Shutdown of Bitcoin Miners Isn’t Just About Electricity, https://www.forbes.com/sites/sarahsu/2018/01/15/chinas-shutdown-of-bitcoin-miners-isnt-just-about-electricity/#1f63e1a7369b, accessed May, 2020.

Thrower B., (2018), Will Bitcoin’s energy consumption require governments to rethink energy policy? https://www.freightwaves.com/news/2018/1/10/will-bitcoin-energy-consumption, accessed March, 2020.

Cryptocurrencies by country, https://blogs.thomsonreuters.com/answerson/world-cryptocurrencies-country, accessed March, 2020.

https://esco.ge/en/energobalansi/by-year-1, accessed May, 2020.

https://www.geostat.ge, accessed May, 2020.

https://gnerc.org, accessed May, 2020.

https://www.nbg.gov.ge, accessed April, 2020.

https://coinmarketcap.com, accessed May, 2020.

https://digiconomist.net, accessed May, 2020.

https://napr.gov.ge, accessed May, 2020.


Full Text: PDF

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.